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EXHIBIT 10.36
GUARANTY OF OBLIGATIONS
(Acquisition Agreement and Lease)
The undersigned, BALANCED CARE CORPORATION, a Delaware
corporation ("Guarantor"), as a material and necessary inducement to HCPI
TRUST, a Maryland real estate investment trust ("HCPI"), to (i) acquire certain
property (the "Property") pursuant to a Contract of Acquisition, dated as of
March 21,1996, with BCC At Mt. Pines, Inc., a Delaware corporation and a
wholly-owned subsidiary of Guarantor ("BCC"), as seller (as the same may be
amended, supplemented or otherwise modified from time to time, the "Acquisition
Agreement") and (ii) enter into a Lease, of even date herewith, with BCC
covering the Property (as the same may be amended, supplemented or otherwise
modified from time to time, the "Lease"), hereby agrees as follows:
1. Guarantor hereby, jointly and severally, unconditionally
and irrevocably guarantees to HCPI:
(a) the payment when due of all costs, expenses, fees,
and other sums payable by BCC under each of the Acquisition Agreement and the
Lease (collectively, the "Documents") and the full, faithful and prompt
performance when due of each and every one of the terms, conditions and
covenants to be kept and performed by BCC under the Documents, including,
without limitation, any and all indemnification and insurance obligations and
all obligations to operate, repurchase, rebuild, restore or replace the
Property or any facilities or improvements now or hereafter constituting a
portion of the Property; and
(b) the payment, on demand, of any fees, costs and
charges of enforcement of the Documents and the preservation and protection of
Property and collateral from BCC, if any, which would be owing by BCC under
clause (a) above, but for the effect of the federal Bankruptcy Code or any
other applicable insolvency laws or laws of similar effect.
The foregoing obligations are hereafter collectively referred to as the
"Guaranteed Obligations." The Guaranteed Obligations shall not be reduced by
any payments or performance made by any other guarantor or surety, the
retention or receipt of any collateral, letter of credit or bond securing or
otherwise supporting the Guaranteed Obligations, or the receipt of any proceeds
thereof. In the event of the failure of BCC to pay or perform any of the
Guaranteed Obligations when due, Guarantor shall forthwith pay or perform the
same, as applicable, and pay all damages that may result from the non-payment
or non-performance thereof to the full extent provided under the Documents.
Guarantor acknowledges that the Guaranteed Obligations may exceed the payment
or performance obligations of BCC under the Documents. Payment by Guarantor
shall be made to HCPI in inunediately available federal funds to an account
designated by HCPI.
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2. Guarantor represents and warrants that:
(a) this Guaranty constitutes the valid and binding
obligation of Guarantor, enforceable against Guarantor in
accordance with its terms;
(b) Guarantor is solvent, has timely and accurately filed
all tax returns required to be filed by it and is not in
default in the payment of any taxes levied or assessed
against it or any of its assets, or subject to any
judgment, audit, order, decree, rule or regulation of any
Governmental Authority (as defined in the Development
Agreement) which would, in each case or in the aggregate,
adversely affect Guarantor's condition, financial or
otherwise, or Guarantor's prospects, or the transactions
contemplated under the Documents;
(c) no consent, approval or other authorization of, or
registration, declaration or filing with, any
Governmental Authority is required for the due execution
and delivery by Guarantor of this Guaranty, or for the
performance by or the validity or enforceability hereof
against Guarantor;
(d) there are no actions, proceedings or investigations,
including eminent domain or condemnation proceedings,
pending or threatened, against or affecting Guarantor,
seeking to enjoin, challenge or collect damages in
connection with the transactions contemplated under the
Documents which could reasonably be expected to
materially and adversely affect the financial condition
or operations of Guarantor;
(e) Guarantor has delivered to HCPI copies of its audited
financial statements for the period(s) ending December
31, 1995. Such financial statements are true, correct and
complete in all material respects, have been prepared
from and in accordance with the books and records of
Guarantor and fairly present the financial position of
Guarantor at the date(s) and for the period(s);
(f) there has been no material adverse change in the
financial condition of Guarantor from that disclosed in
its financial statements described in Section 2(e) above;
and
(g) neither this Guaranty nor any certificate, statement
or other document furnished or to be furnished to HCPI by
or on behalf of Guarantor in connection with the
transactions contemplated under the Documents contains or
will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in
order to make the statements contained herein or therein
not misleading.
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3. Guarantor hereby unconditionally and irrevocably indemnifies, protects and
agrees to defend and hold harmless HCPI from and against any and all loss, cost
or expense, including costs and reasonable legal fees, arising from the breach
or violation of any representation or warranty of Guarantor hereunder.
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4. In such manner, upon such terms and at such times as HCPI in its sole
discretion deems necessary or expedient, and without notice to or consent by
Guarantor, which notice and consent are hereby expressly waived by Guarantor,
HCPI may alter, compromise, accelerate, extend or change the time or manner for
the payment or the performance of any Guaranteed Obligation; extend, amend or
terminate the Documents; release BCC or any other party to a Document by
consent to any assignment (or otherwise) as to all or any portion of the
Guaranteed Obligations; release, substitute or add any one or more guarantors
or lessees; accept additional or substituted security for any Guaranteed
Obligation; or release or subordinate any security for any Guaranteed
Obligation. No exercise or non-exercise by HCPI of any right hereby given HCPI,
no neglect or delay in connection with exercising any such right, no dealing by
HCPI with BCC, any other guarantor or any other person, and no change,
impairment, release or suspension of any right or remedy of HCPI against any
person, including BCC and any other guarantor or other person, shall in any way
affect any of the obligations of Guarantor hereunder or any security furnished
by Guarantor or give Guarantor any recourse or right of offset against HCPI. If
HCPI has exculpated BCC or any other party to a Document from liability in
whole or in part and/or agreed to look solely to the Property, any security for
the Guarantor's Obligations or any other asset for the satisfaction of the
Guaranteed Obligations, such exculpation and/or agreement shall not affect the
obligations of Guarantor hereunder, it being understood that Guarantor's
obligations hereunder are independent of the obligations of BCC, any other
guarantor and any other party to a BCC Document, and are to be construed as if
no such exculpation or agreement had been given to BCC, any other guarantor or
any other party to a BCC Document. It is further understood and agreed that if
any such exculpation or agreement has been or at any time hereafter is given to
BCC, any other guarantor or any other party to a BCC Document, HCPI has done or
will do so in reliance upon the agreement of Guarantor expressed herein.
5. In addition to and without derogation of or limitation on
any liens and rights of set-off given to HCPI by law against any property of
BCC, Guarantor and any other guarantor or other person, HCPI shall have a
general lien on and security interest in and a right of set-off against all
property of Guarantor now or hereafter in the possession of or under the
control of HCPI, whether held in a general or special account, on deposit, held
for safekeeping or otherwise in the possession of or under the control of HCPI.
Each such lien, security interest and right of set-off may be enforced or
exercised without demand upon or notice to Guarantor, shall continue in full
force unless specifically waived or released by HCPI in writing and shall not
be deemed waived by any conduct of HCPI, by any failure of HCPI to exercise any
such right of set-off or to enforce any such lien or security interest or by
any neglect or delay in so doing.
6. Guarantor hereby waives and relinquishes all rights and
remedies accorded by applicable law to sureties and/or guarantors or any other
accommodation parties, under any statutory provision, common law or any other
provision of law, custom or practice, and agrees not to assert or take
advantage of any such rights or remedies, including, without limitation, (a)
any right to require HCPI to proceed against BCC, any other guarantor or any
other person or to proceed against or exhaust any security held by HCPI at any
time or to pursue any other remedy in HCPI's power before proceeding against
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Guarantor; (1)) any defense that may arise by reason of the incapacity, lack of
authority, insolvency, bankruptcy, death or disability of any other guarantor
or other person or the failure of HCPI to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) of any other
guarantor or other person; (c) notice of the existence, creation or incurring
of any new or additional indebtedness or obligation or of any action or
non-action on the part of BCC or any other party to a BCC Document, or any
creditor thereof, or on the part of any other guarantor or other person under
any other instrument in connection with any obligation or evidence of
indebtedness held by HCPI or in connection with any Guaranteed Obligation; (d)
any defense based upon an election of remedies by HCPI which destroys or
otherwise impairs any subrogation rights of Guarantor or any right of Guarantor
to proceed against BCC or any other party to a Document for reimbursement, or
both; (e) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (f) any duty on the part
of HCPI to disclose to Guarantor any facts HCPI may now or hereafter know about
BCC or any other party to a BCC Document, regardless of whether HCPI has reason
to/believe that any such fact materially increases the risk beyond that which
Guarantor intends to assume or has reason to believe that any such fact is
unknown to Guarantor or has a reasonable opportunity to communicate such fact
to Guarantor, it being understood and agreed that Guarantor is fully
responsible for being and keeping informed of the financial condition of BCC
and all other parties to a Document and of all circumstances bearing on the
risk of non-payment or non-performance of any Guaranteed Obligation; (g) any
defense arising because of HCPI's election, in any proceeding instituted under
the federal Bankruptcy Code, of the application of Section 1111 (b)(2) of the
federal Bankruptcy Code; (h) any defense based upon the validity or
enforceability of, or change in, this Guaranty, or any of the Documents; (i)
any defense or rights arising under any appraisal, valuation, stay, extension,
marshalling of assets, redemption or similar law or requirement, which may
delay, prevent or otherwise affect the performance by Guarantor of any of the
Guaranteed Obligations; (j) diligence, presentment and demand; (k) any
requirement to mitigate any damages resulting from any default under any of the
Documents; and (l) any defense based on any borrowing or grant of a security
interest under Section 364 of the federal Bankruptcy Code. Without limiting the
generality of the foregoing or any other provision hereof, Guarantor hereby
expressly waives any and all benefits which might otherwise be available to
guarantors under the laws of the Commonwealth of Pennsylvania, in each instance
to the extent such laws, or any one of them, are applicable to this Guaranty,
the Documents or any of the Guaranteed Obligations.
7. Until all of the Guaranteed Obligations have been
satisfied and discharged in full, Guarantor shall not exercise its right of
subrogation and Guarantor hereby waives any right to enforce any remedy which
HCPI now has or may hereafter have against BCC, any other guarantor or any
other party to a Document and any benefit of, and any right to participate in,
any security or other assets now or hereafter held by HCPI with respect to any
of the Documents.
8. All existing and future indebtedness and other
obligations to Guarantor of BCC and each other party to a Document and the
right of Guarantor to withdraw any capital invested by Guarantor in BCC is
hereby subordinated to the Guaranteed Obligations.
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From and after the occurrence of any event of default under any BCC Document,
no portion of such subordinated indebtedness or capital shall be paid or
withdrawn, nor will Guarantor accept any payment of or on account of any such
indebtedness or as a withdrawal of capital, without the prior written consent
of HCPI. At HCPI's request, Guarantor shall cause BCC or such other party to
pay to HCPI all or any part of such subordinated indebtedness or capital which
Guarantor is entitled to withdraw for application by HCPI to the Guaranteed
Obligations. Any payment of such subordinated indebtedness and any capital
which Guarantor is entitled to withdraw which is received by Guarantor after
receipt of the above-referenced request shall be received by Guarantor in trust
for HCPI, and Guarantor shall cause the same to be paid immediately to HCPI on
account of the Guaranteed Obligations. No such payment shall reduce or affect
in any manner the liability of Guarantor under this Guaranty.
9. Guarantor shall file in any bankruptcy or other
proceeding in which the filing of claims is required by law all claims which
Guarantor may have against BCC or any other party to a Document or relating to
any indebtedness or obligations of BCC or any other party to a Document to
Guarantor and will assign to HCPI all rights of Guarantor thereunder. If
Guarantor does not file any such claim, HCPI, as attorney-in-fact for
Guarantor, is hereby authorized to do so in the name of Guarantor or, in HCPI's
discretion, to assign the claim to a nominee and to cause a proof of claim to
be filed in the name of HCPI's nominee. The foregoing power of attorney is
coupled with an interest and is irrevocable. HCPI or its nominee shall have the
sole right to accept or reject any plan proposed in any such proceeding and to
take any other action which a party filing a claim is entitled to do. In all
such cases, whether in administration, bankruptcy or otherwise, the person or
persons authorized to pay such claim shall pay to HCPI the amount payable on
such claim and, to the full extent necessary for that purpose, Guarantor hereby
assigns to HCPI all of Guarantor's rights to any such payments or distributions
to which Guarantor would otherwise be entitled; provided, however, that
Guarantor's obligations hereunder shall not be satisfied except to the extent
that HCPI receives cash in full or property acceptable to HCPI by reason of
such payment or distribution. If HCPI receives anything under this Guaranty
other than cash in full or property acceptable to HCPI, the same shall be held
as collateral for amounts due under this Guaranty.
10. With or without notice to Guarantor, HCPI, in HCPI's
sole discretion and at any time and from time to time and in such manner and
upon such terms as HCPI deems fit, may (a) apply any or all payments or
recoveries from BCC or from any other guarantor or party to a Document or
realized from any security, in such manner and order of priority as HCPI may
determine, to any indebtedness or obligation of BCC with respect to the
Documents, whether or not such indebtedness or obligation is a Guaranteed
Obligation or is otherwise secured or is due at the time of such application,
and (b) refund to BCC any payment received by HCPI under any of the Documents.
11. The amount of Guarantor's liability and all rights,
powers and remedies of HCPI hereunder and under any other agreement now or at
any time hereafter in force between HCPI and Guarantor, including, without
limitation, any other guaranty executed by Guarantor relating to any
indebtedness or other obligation of BCC to HCPI, shall be
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cumulative and not alternative, and such rights, powers and remedies shall be
in addition to all rights, powers and remedies given to HCPI by law. This
Guaranty is in addition to and exclusive of any other guaranty of the
Guaranteed Obligations, including, without limitation, any other guaranty.
12. The obligations of Guarantor hereunder are primary,
direct and independent of the obligations of BCC and any other party to a BCC
Document, including, without limitation, any other guarantor, and, in the event
of any default under any of the Documents following the expiration of any grace
period, a separate action or actions may be brought and prosecuted against
Guarantor, whether or not BCC or any other party to a BCC Document, including,
without limitation, any other guarantor, is joined therein or a separate action
or actions are brought against BCC or any other party to a BCC Document,
including, without limitation, any other guarantor. HCPI may maintain
successive actions for other defaults. HCPI's rights hereunder shall not be
exhausted by its exercise of any of its rights or remedies or by any such
action or by any number of successive actions until and unless all Guaranteed
Obligations have been paid in full in cash or performed in full.
13 Guarantor shall pay to HCPI reasonable attorneys' fees
and all costs and other expenses which HCPI expends or incurs in collecting or
compromising or enforcing payment or performance of the Guaranteed Obligations
or in enforcing this Guaranty, whether or not suit is filed, including, without
limitation, all reasonable attorneys' fees and all costs and other expenses
expended or incurred by HCPI in connection with any insolvency, bankruptcy,
reorganization, arrangement or other similar proceedings involving Guarantor
which in any way affects the exercise by HCPI of its rights and remedies
hereunder.
14. If any provision or portion of this Guaranty is declared
or found by a court of competent jurisdiction to be unenforceable or null and
void, such provision or portion hereof shall be deemed stricken and severed
from this Guaranty, and the remaining provisions and portions hereof shall
continue in full force and effect.
15. This Guaranty shall inure to the benefit of HCPI, its
successors and assigns, including, without limitation, the assignees of any of
the Guaranteed Obligations, and any subsequent owners or encumbrancers of the
Property, and shall bind the heirs, executors, administrators, personal
representatives, successors and assigns of Guarantor, whether by operation of
law or otherwise; provided, however, that Guarantor may not, without HCPI's
prior written consent, which such consent may be granted or withheld in HCPI's
sole discretion, assign or transfer any of its rights, powers, duties or
obligations hereunder. This Guaranty may be assigned by HCPI with respect to
all or any portion of the Guaranteed Obligations to any subsequent owners or
encumbrancers of the Property. When so assigned, Guarantor shall be liable to
the assignees under this Guaranty without in any manner affecting the liability
of Guarantor hereunder with respect to any of the Guaranteed Obligations
retained by HCPI.
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16. No provision of this Guaranty or right of HCPI hereunder
can be waived in whole or in part, nor can Guarantor be released from its
obligations hereunder, except by a writing duly executed by an authorized
officer of HCPI.
17. When the context and construction so require, all words
used in the singular herein shall be deemed to have been used in the plural and
the masculine shall include the feminine and neuter and vice versa. The word
"person" as used herein shall include any individual, company, firm,
association, partnership, corporation, trust or other legal entity of any kind
whatsoever. The term "BCC," as used herein, shall mean the party herein so named
and its successors and assigns, whether by operation of law or otherwise,
including, without limitation, a debtor in possession under Chapter 11 of the
federal Bankruptcy Code and any other person at any time assuming or succeeding
to all or substantially all of the Guaranteed Obligations.
18. Guarantor represents and warrants that the value of the
consideration received, and to be received, by Guarantor in connection with the
transactions contemplated under the Documents is worth at least as much as the
liabilities and obligations of Guarantor under this Guaranty, and that such
liabilities and obligations are expected to benefit Guarantor either directly
or indirectly.
19. EXCEPT WHERE FEDERAL LAW IS APPLICABLE AND UNLESS
OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
Guarantor hereby (a) irrevocably submits to the jurisdiction of the state and
federal courts of the Commonwealth of Pennsylvania and consent to service of
process in any legal proceeding arising out of, or in connection with, this
Guaranty, by any means authorized by Pennsylvania law; (b) irrevocably waives,
to the fullest extent permifled by law, any objection which Guarantor may now
or hereafter have to the laying of venue of any litigation arising out of, or
in connection with, this Guaranty, brought in the state courts of Allegheny
County, Commonwealth of Pennsylvania, or in the United States District Court
for the District in which such County is located; and (c) irrevocably waives
any claim that any litigation brought in any such court has been brought in an
inconvenient forum.
20. GUARANTOR ACKNOWLEDGES THAT IT HAS HAD THE ADVICE OF
COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY UNDER THE
CONSTITUTIONS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA.
GUARANTOR HEREBY EXPRESSLY WMVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS GUARANTY OR (2) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF HCPI AND
GUARANTOR WITH RESPECT TO THIS GUARANTY OR ANY OTHER INSTRUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED
HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND GUARANTOR HEREBY
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AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT HCPI MAY FILE A COPY
OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH
GUARANTOR TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
Guarantor's Initials: BB
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21. Except as provided in any other written agreement now or
at any time hereafter in force between UCPI and Guarantor, this Guaranty sh~
constitute the entire agreement of Guarantor with HCPI with respect to the
subject matter hereof, and no representation, understanding, promise or
condition concerning the subject matter hereof shall be binding upon HCPI or
Guarantor unless expressed herein.
22. This Guaranty shall remain in full force and effect and
continue to be effective in the event any petition is filed by or against BCC,
any other party to a Document or Guarantor for liquidation or reorganization,
in the event Guarantor becomes insolvent or makes an assignment for the benefit
of creditors or in the event a receiver or trustee is appointed for all or any
significant part of the assets of BCC, any other party to a Document or
Guarantor, and shall continue to be effective or be reinstated, as the case may
be, if at any time payment or performance of the Guaranteed Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount,
or must otherwise be restored or returned by HCPI, whether as a "voidable
preference," "fraudulent conveyance" or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Guaranteed
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
24. Guarantor will from time to time promptly execute and
deliver all further instruments and take all further action that may be
necessary or desirable, or that HCPI may reasonably request, in order to enable
HCPI to exercise and enforce its rights and remedies under this Guaranty or to
carry out the provisions and purposes hereof.
25. Any notice, demand and other communication hereunder
shall be given in accordance with the provisions therefor set forth in the
Lease, except that for purposes of this Guaranty the address for notice for
Guarantor is set forth below its signature hereto.
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EXECUTED as of this 21st day of March, 1996.
"Guarantor"
BALANCED CARE CORPORATION, a
Delaware corporation
By: /s/ Xxxxx X. Xxxxx
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HS: Vice President
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ADDRESS FOR NOTICES:
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxxx, President
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